The new Government has announced changes to the 90 day trial period provided for in the Employment Relations Act 2000. Small businesses, those with fewer than 20 employees, will still be able to include trial periods in their employment agreements, but the 70 per cent of New Zealand workers employed by larger employers will no longer be subject to trial periods. This change is likely to take effect within the next few months.

As it stands, the law gives employers of all sizes the option of using trial periods and probationary periods to assess employees and make sure that they can do the job.

Although used for similar reasons, trial and probationary periods have different requirements and effects. Importantly, an employee cannot bring a personal grievance for unjustified dismissal at the end of a trial period, but they can bring a personal grievance in relation to a probationary period. If you are a party to an employment contract, you need to understand the difference and the resulting implications for you.

It can be confusing trying to keep up with law changes, and making sure that legal requirements are met so that expensive disputes are avoided. In our experience, it pays to get advice early in the process before problems occur.